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6/28/11

6/27/11

Outside: The Town Seethes A Disquieting Heat

Inside: Blinds drawn waiting for gunfight in the street...


This summer will be a watershed moment for Arizona in the sense that many more people will accept the reality of the fundamental economic and social problems we face in our state. These are essentially the same as the rest of the country except we have economic indicators that seem technically not so bad but are deeply rooted in our almost total dependence on growth by continuous construction and real estate investment. The saloon brawl is over, egos and finances have been bruised, the stockmen and gamblers have retreated to their gathering places and all is quiet in town for the moment, waiting...

On Labor Day 2009 I did a video blog "The Economy and Me: My Hometown, Phoenix AZ" in which I discussed the fundamental problems of our state. On March 17, 2010 I wrote a blog "Phoenix Economic Crisis in Six Paragraphs" that outlined six fundamental problems we face. Two days later I wrote Part Two "We Will Still Need To Wear Shades" of how these six underlying points needed to be addressed if we were going to restore ourselves. These six essential problems still exist and actually were postponed due to 2010 being a year of respite where the inevitable was forestalled by loose money policies of the Federal government.

The points are:

  • Residential Mortgage/Lender Crisis
  • Unemployment/Underemployment
  • State Government Insolvency
  • Commercial Real Estate
  • Immigration and Population
  • Denial and Acceptance

These points remain essentially the same although some events over time have modified or accelerated them. The underlying problem to everything is simple: too much debt and the only way to resolve any of these points is deleveraging and bringing down the debt load of governments and individuals. The standoff between debtors and lenders cannot be forestalled any longer, the moment of who draws guns first has arrived.

The Real Estate problem, both Residential and Commercial along with the Mortgage/Lender Crisis, is heading for a Double Dip that is far worse than the first. At what point people are on the Denial and Acceptance continuum depends on what position they hold in the market. There is not much to be said that hasn't already been said on this topic except that City of Phoenix core has stayed relatively stable to what it had already dropped to. The city is ringed by cheaply built cookie cutter suburbs, mostly sub-prime, that are falling apart and much more underwater than residential and commercial real estate in Phoenix. The entire metro area will not escape another drop though with a few small exceptional pockets.

Unemployment and Underemployment is our most vexing problem. Although our numbers are slightly lower than the national average we're actually in worse shape. Realistically unemployment is somewhere between 15% and 25% but difficult to gauge since we do not have a stable long term population and an inept Local Census Bureau operation lacked credibility in being able to account for that with any semblance of accuracy. Those that are employed or underemployed are primarily in low wage jobs, have received little pay increases and are paying higher health insurance premiums making net pay lower. The jobs we have lost are gone and will not be coming back. This summer what businesses that have not died or fled the state, either because they are teetering or see no future here, will either be killed off or fly the coop. Some of the things that are against us now may very well be what saves us, such as inexpensive, plentiful commercial real estate and a hard working low wage labor force that is known for developed customer service skills.

Our State Government did a good job of balancing a budget the first year of this Legislative Session but the way Arizona government is organized, the burden falls on the counties, cities and towns that for the most part are acting in denial. Eventually they will have to cut services since the tax revenue provided to them by the state simply is not coming in. The political class and bureaucracies of Phoenix and Prescott are particularly guilty of being foolish and unrealistic with their expectations. They continue to operate as if the taxpayers can afford to subsidize their relatively luxurious salaries, benefits and are forging ahead with unrealistic projects and services. The police and fire unions will eventually have to capitulate on salaries, benefits and pensions along with "double dipping" into the system on all levels will have to cease.

Immigration in the form of illegal immigration has slowed by legislation well known as SB1070 but it certainly has not stopped. Our population both illegal and legal has gone underground; much of the legal population of all ethnic groups cannot afford to be out and about as they once did. Significant segments that do are spending borrowed money which also means borrowed time and will end sooner rather than later. We have a high student population due to the wide variety of educational institutions, especially in Phoenix, that traditionally have drawn positive impressions of the state and they either stayed or spread the good word when they left. Now they are just leaving since we are unable to offer them good employment at high wages to pay their colossal student indebtedness back. We are slowly building a strong solar industry which will require us to educate our population in that area as well as other industries we are gradually establishing.

We are in the same position I stated in my video blog of Labor Day 2009. It haunts of an era gone by of the old western town before there is a standoff. Everyone has gone inside, locked the doors and drawn the blinds hoping nothing will happen but knowing that something will. Some are in acceptance and others are in denial. What will occur is a white hat and a black hat representing the debtors and the loan holders, who is wearing what hat depends on point of view, will have a gunfight and one of them will lose triggering off other bullets to fire. When it's all over the dust will eventually settle and the town will inevitably come out and life will begin again. It will take time to reshape what we have and into something more sustainable and substantive but there is every reason to believe Arizona has all the basic elements needed to get fundamentals right again.

http://www.youtube.com/watch?v=FbCARgTdin8&hd=1

6/25/11

If You Are Unemployed or Underemployed

Make the most of your time...

Escapism is not a good full time occupation due to consequences.

Recent studies are indicating that TV watching and sleeping is rising rather than learning, exercise or self-improvement among the unemployed or underemployed. Other studies indicate that use of prescription psychoactive and painkiller drugs is escalating. Among developed countries the US is the third most expensive place to acquire cocaine along with its cousin methamphetamine due to high demand equaling high pricing by drug dealers. Americans are retreating into escapism and it should be no surprise given the state of our economy. Gratification providers are opportunistic capitalists and more than willing to make a profit at the expense of peoples need for comfort and their weaknesses.

As someone who has experienced both unemployment and underemployment since 2007 I can attest that this is a mistake I personally see a lot of people making. When I lost my job in 2007 due to the mortgage/foreclosure crisis, I determined that I was going to remain positive. It occurred in late summer and the stock market was cascading downward and it was clear that things were definitely awry in the economy in general and the first layoffs in the real estate, construction and financial industry were beginning. It seemed obvious to me that getting employment that matched what I had was unlikely. Fortunately there was another income in my household and by cutting expenses we would be alright for the time being.

My first goal was to keep my time occupied and I determined a course of action that was twofold. The first was practical; take care of items around the home that had been neglected and had fallen by the wayside that two full time working adults often don't have time or inclination for. The other was to reinvigorate my creative interests and cultivate them further. I set goals to improve my creating website and video content aptitude and learn more about interacting on the social web with the natural byproduct of gaining information to get those skills. I wanted to learn more about web templates, CSS, photography, video editing and improve my writing among other things.

It made sense to me to set out on trying to find any income where I could, even if they were small amount multiple streams, for my own sake of pride and pocket money. I have competence in legal work and did temporary and short term projects as well as contracting myself out to individuals and small groups whose technical savvy was behind the curve and wanted help using computers, the web and smartphones for job retention or seeking. I worked part-time for government agencies even though I dislike working in them the fact it was not permanent made it palatable. There were dry spells of income between and sometimes it was sketchy if we were even going to break even at times.

Think beyond the long term social, economic and political disruption.

This is a long term economic reset and it is likely to get worse before it gets better. The road to worldwide and American economy readjustment is a long one that is mostly uphill. Since there are no easy resolutions, as TARP and Quantitative Easing have proven, we may as well settle into the idea of making the best we can of it. My point is that during this time I think we are going to be divided not so much by education or income but by who is making the best use of their time with limited resources and those who are languishing by the wayside. This is a personal choice and I make no judgment on those who choose to fall into escapism but reserve my right not to associate with them or allow them to interfere with my well-being.

As it happens, those people I know who have been taking these past few years of unemployment and underemployment and undertaking self-development are getting some rewards for their efforts. Personally through being engaged with activities and other people I was gaining a new network of people in similar situations. Just over a year ago, right as I was beginning to think I would never hold a regular job again and have health insurance, through my associations and a recommendation I obtained a part-time job with inexpensive health benefits. The pay is much lower than I'm used to but it supplements another regular income I now have. Additionally through my creative work I'm still able to pick up pocket money. None of this would have happened if I had not remained positive and kept myself going.

This has gone a long way to improve not only my financial situation but also my sense of self although life has not returned to what it was financially. Looking back, I'm not sure now I need it to, I've learned a whole new way of living that has given me a sense of liberty and freedom I didn't have when working the drudgery of a "real job for The Man." My concept of thinking if you're doing the right thing the money will follow has been reinforced. I'm not as concerned for the future since I believe that if I maintain and keep current on changes in the society and the way we all will be living then my personal economic condition will eventually improve naturally.

Prepare for after the storm looking toward the future.

There have been times that managing my outlook has been a challenge and it takes work to keep going. During those times it is a matter of pressing forward even if it is slowly rather than pausing and risk momentum. To me it is a mistake to fall into watching too much TV, losing yourself passively watching sports, relying on chemically altering the mind for pleasure and other negative escapism. Whatever your interests are, be they creative endeavors, active sports, outdoor pursuits, mental and intellectual improvement or any combination, figure out a way to engage in them. If money is tight or non-existent there is always something you can do for healthy gratification and positive interaction with people.

This social, economic and political upheaval will end some day and your future beyond that depends upon what you are doing during it.

6/22/11

What Are You Afraid Of?

Fear and denial is an opportunity for reinvention...

It seems to me that two psychological modes have escalated recently which I attribute to the dawning of recognition among more people that our economy is at best stagnant and our political system is not acting in our interests. Too many people are responding by operating either out of fear or retreating into denial. Neither of these conditions work for long and eventually will breakdown into something else. How you deal with them determines the direction your life will take once you move beyond them. The first step is to cognitively recognize you are in one of those modes and then take steps to move beyond them. Avoidance of the basis for fear or denial is not resolution. The point is to avoid falling into negativity, despair, depression or turn to drugs or alcohol.

There are steps to follow that will get you moving in the right direction.

Assess where you are and dig deep and unravel why you feel the way you do and what is the worst that could possibly happen. This is an exercise in fear in itself but having the strength of character to do it will develop your character even further. You are likely to discover that your biggest fears are either groundless or can be overcome by figuring out a plan to overcome them.

Decide what actions you can take right now by prioritizing and dealing with any immediate problems you have in a semblance of order of resolution. An old fashioned piece of paper and pencil goes a long way in writing down specific things you can do to take care of that bank account, loan, unemployment, bad relationship, anything that is bothering you no matter how large or small. The act of writing it down and organizing it on paper works remarkably well at turning abstract worries into concrete potential solutions.

Do not get overwhelmed at what you have discovered. Step back for a moment, breathe and break complications into pieces and start on those that can be dealt with easily and straight off. Getting what you can off the list promptly whittles it down and helps you realize that there is a beginning to solving problems and conversely eventually there will be an end. Start small to boost confidence and keep on moving through the complications that are causing you fear or you are denying. One step at a time eventually gets you somewhere while standing still does not.

Sometimes declaring insolvency is the answer and it isn't always financial. It can be relationships, style of living, your location or place of living. If you have to declare bankruptcy then do it legally instead of walking away. End bad relationships and avoid people who are negative and dragging you down. It may seem heartless but it's your sanity and peace of mind that is important and someone else's shouldn't take priority. If your lifestyle is not what you want it to be change or modify what is under your control. If you live in a dead end city or small town, decide where you want to go and determine a way to get there. Think innovatively how you can earn an income in unconventional ways, some of them may seem off the wall but they spark a process in your mind.

Ultimately it is up to you to shake off the fear that ails you or what you are avoiding and denying. We are living in a historical cycle of disruptive change and to live atypically and individualistic is no longer irregular and soon to be the norm. Get a head start and arrive earlier at building a new mode of living. Fear and denial are signals that your current internal life no longer matches your external one and not working in your favor. Heed the beacon, delve into the cause and view it as an opportunity for a breakthrough to reinvention of self.

6/20/11

American Exceptionalism

Basis for reemergence from economic disruption...

How our current government and political system became a bastard.

Despite the disparaging attitude self-named Progressives (Social and Liberal Democrats) hold toward the concept of American exceptionalism, it is the primary factor that will cause the United States to resurge after an extended period of economic downturn and political disruption. A case can be made that the underlying real reason for the current problems we are now experiencing is the Federal government acting outside of the US Constitution. The background for this conjecture is based in history from the beginning of the Progressive movement in the early 20th century, which is rooted in communism and socialism, to today when progressive concepts have seeped into American government. The movement crept into our system after the WWI, reinforced by FDR's New Deal programs, illegally created through Executive Orders rather than constitutional means, further buttressed by LBJ's Great Society programs. Corporations and so-called Conservatives (Corporate Republicans) are not without blood on their hands in this inadvisable folly, since they willingly went along with distortion of the true intent for the United States in the US Constitution, that made this country exceptional.

The year 1913 is significant due to the 16th Amendment creating the authority to collect income taxes and the 17th Amendment allowing the direct election of Senators. Both of these amendments go directly against concepts of the Founding Fathers intentions and the ideals that influenced them. They were ratified when the Progressive movement was at its height being passed off as Populism. The distorted form of the Federal government of today has also been reinforced by the US Court system acting in ways that it was never intended to and misuse of Executive Orders by Presidents of the US. Although a case could be made that this illicit form of governing began with the Civil War, our situation today springs more from the early 20th Century. To state it succinctly, the Progressive movement with the aid of Populists was the root and cause of the federal government acting extraconstitutionally through their infiltration of bureaucratic agencies. We are still operating under those rules with complicit acceptance by both major political parties.

Our government is unconstitutional therefore unlawful.

Then by default this makes our current Federal Government and Congress an illegitimate government operating outside the boundaries laid down by the Founding Fathers in the US Constitution. They established those foundations for a reason, to avoid the type of surreptitious government illegally governing the country today.

Ignorance of history and the founding of our nation is the enemy.

One of the biggest shifts after WWI that the progressive movement and populists advanced was the notion of shifting economics and therefore law, away from the power of the Industrialists, who were also operating extraconstitutionally and not in true laissez-faire capitalism as the Founding Fathers intended. They had conspired with politicians to pass laws in their favor, distorting true free market enterprise, creating a response by the progressive and labor movement to shift legislation and by default bureaucratic agencies to the consumer and worker. At first glance this may not seem like a bad thing. The difficulty lies in that both sides deformed the values that made the United States of America an exceptional nation through legislative arm twisting. Although the progressives are the most covert of the two, the industrialists who are now contemporary corporations, are just as guilty. They are co-conspirators playing a sham game of good versus evil which is apocryphal and beguiling.

The shift in emphasis to the consumer and worker away from a true free market of entrepreneurs and producers with buyers was the beginning of regulated market modern day consumerism. Consumerism is the root cause of our current economic and political situation. It is an economic way of life that must be perpetuated in order to be maintained and ultimately must end up in self-immolation by its very nature. Everything else from fiat money inflation, political bastardization, debt overhang, unemployment, is the aftermath of construction of an economy built on over-consumption of consumer goods. There is nowhere to go any more with this mode of economic madness and no matter how much has been puffed into this style of living globule it is doomed. There have been outliers shouting this in the wilderness for decades but they have been largely ignored in the pale since the crash was not imminent. Now it is here. Any thinking person recognizes that somehow, sooner rather than later, in our lifetime, in the near future, the consumer economy will in the end be dead on arrival. It is this force that will ultimately cause the social, economic and political downfall and disruption of our current system.

America is exceptional due to its original ideals and the people.  

It is not the end but the catalyst for a revival of the America Way. America is a unique nation, founded without a long history of an inherited class structure, flavored with a variety of immigrants and based on principles of liberty, individualism, equality, freedom, laissez-faire, justice and organized in a thoughtful deliberate fashion by a document that is the US Constitution. It is with these assets this country will revive and restore itself. This American exceptionalism, closely aligned with Manifest Destiny, has been trampled on, scoffed at, denigrated, disparaged and degraded. Still, it
lives in the minds and hearts of many, regardless of over a century and generations of reeducation to try to stamp it out of existence. For every person that never came unstuck from the American Spirit that it is inherent in the American character, now is the time to rise above and bring out the very best qualities that live within us. It is these qualities that make us exceptional, which will allow the country to be rebuilt anew based on the enduring principles upon which it was founded. This is the basis for the reemergence from economic, political and social disruption that is plaguing our country and in a cataclysmic way will be cast out, while we simultaneously refashion what we already have that is worthwhile keeping and start creating new accomplishments again.